Iowa Ledger (2021) - Tippie College of Business

HOT TOPIC
What do you think of the U.S. government’s proposal
to raise the minimum corporate tax rate?
For many years, the U.S. corporate tax rate
was 35%, which was the highest among
developed countries. When the tax rate was
lowered to 21% in 2018, it was a nice boost
for inbound investment and returning jobs to
the U.S. I think that by lowering the tax rate,
it significantly enhanced the competitiveness
of U.S. multinational corporations. Now,
President Biden is proposing a rate of 25%.
I’m not personally a big fan of this proposal,
I think it should stay in the low twenties,
but I understand the need to raise revenue
by the government.
I do like Biden’s initiative about implementing
a global minimum corporate tax, because
even with a 21% or 25% tax rate, the U.S.
can still not compete with lower tax rate
countries. A minimum global tax rate would
put countries on a level playing field.
On October 8, 2021, 136 out of 140 countries
in the EU agreed to enforce a corporate tax
rate of at least 15% and a fairer system of
taxing profits. This is a significant milestone
towards implementing a fair global taxation
system and a very encouraging move!